Jefferies Sees McDonald's Stock as Undervalued Amid Growth Prospects

Jefferies maintained its 'Buy' rating on McDonald's Corp. () despite ongoing challenges in the quick-service restaurant industry.

The firm reiterated a price target of $325.00, which is nearly 38% higher than the current stock price of $238.32, close to its 52-week low of $234.03.

According to Jefferies' analysis, McDonald's new long-term growth algorithm has exceeded expectations for operating margin expansion through 2030, driven by a return to low single-digit percentage same-store sales growth.

The company's 'NEXT' initiative is expected to support a remodel cycle larger than previously anticipated, with capital expenditure and rent relief over the next decade playing a crucial role in this effort.